It seems that the vast majority of economists and analysts are worried about the “record” levels of unemployment and mortgage delinquencies. But should they? Yes by all accounts they are at levels not seen in “modern” history but perhaps these two indicators of the health of the economy are merely lagging indicators and turn down well after the fact. We place more emphasis on the trend of continuing and initial jobless claims. Since July last year both continuing and initial claims have been improving and dramatically so……but even then these indicators lagged the stock market by at least 3 months. So it is debatable how much of an edge (if any) analysing the jobs market and residential delinquencies gives traders. Perhaps this is best left to those who want to get paid for sounding intelligent!
All that being said, given the rising levels of bond yields globally and the fact that even now the Chinese have raised short term rates (along with the Norwegians and Australians) one does start to get a little nervous given that delinquencies and unemployment remains at record levels . I don’t seem to recall any time in history where rising interest rates was supportive of lower mortgage delinquencies and unemployment!
US Unemployment
US Mortgages Delinquent
US Jobless Claims Continuing
